Maxjet Airways ceases operations

The carrier files for bankruptcy protection after it fails to secure financing to keep flying.

Maxjet Airways, an all-business-class carrier that began flying nonstop flights between Los Angeles and London in August, ceased operations Monday, leaving jets on the tarmac and stranding passengers on Christmas Eve.

The Dulles, Va.-based airline, one of the first to offer transatlantic business class travel at coach prices, said it filed for Chapter 11 Bankruptcy Court protection after it could not obtain financing to continue flying.

"With today's fuel prices and the resulting impact on the credit climate for airlines, we are forced to take this drastic measure," William D. Stockbridge, chief executive of Maxjet, said in a statement on the carrier's website.

The bankruptcy filing is not likely to signal any broader problems with all-business-class airlines and is expected to have little effect on air travel at Los Angeles International Airport because the carrier had a limited number of flights and few passengers, analysts said.

Maxjet operated four flights a week -- every Monday, Thursday, Friday and Sunday -- since it started the LAX service Aug. 30. In recent weeks many of the flights were less than half full with some planes having fewer than 30 passengers, or less than a third of their capacity.

In all, the airline operated five Boeing 767 jets and flew nonstop flights between London's Stansted Airport and three U.S. cities: New York, Las Vegas and Los Angeles.

The airline was launched two years ago at a time when transatlantic flights began to boom with business travelers. Its jets were configured with 102 seats compared with about 200 on other 767 planes, but it charged fares that were similar to walk-up economy tickets. The carrier was particularly popular with business travelers in New York.

But in recent months, large carriers steeply discounted their business class seats and were able to stem Maxjet's efforts to lure away customers. At the same time, soaring fuel costs and tight credit markets left the airline with little financial wiggle room.

The carrier had "been sustaining heavy losses in the brutally competitive U.S.-U.K. market and has been forced to discount heavily to keep up its load factors," said Joe Brancatelli, who runs a website for business travelers, joesentme.com.

The bankruptcy filing came just two weeks after trading of the carrier's shares was halted.

The airline said passengers returning to Los Angeles from London would be booked on other airlines and would be provided hotel rooms while waiting for their return flight.

New York-bound passengers will be booked on Eos Airlines, a competing all-business-class carrier.

Stockbridge said the airline was extending its apologies to the passengers and added that it was "extremely saddened to discontinue a service that we so passionately believe in."